[All articles in this Immigration Fiscal Impact Statement series can be viewed in a single pdf document]

The State Department’s mission is to “[c]reate a more
secure, democratic, and prosperous world for the benefit of the American people
and the international community.” Cite.

Visa Fraud Prevention

While the Department of Homeland Security administers U.S. immigration law within the United States, the State Department is responsible for adjudicating
visas overseas. In fact, the State Department’s consular corps plays such an
important role in immigration control that it is often referred to as the
“Other Border Patrol.”

Spending on diplomatic and
consular programs is estimated at $4.943 billion in the 2008 budget. It is the
most expensive item listed in the State Department’s budget summary. Cite.

As is brought out below, the
system doesn’t work well. About half of all illegal aliens entered the United States legally after being vetted by State Department consular
officers in their home country. Despite the interview and document verification
process, they overstayed their visas.

Failure to identify visa
abuses reflects an inherent conflict of interest in the State Department’s
mission—that is, its twin roles as both the nation’s chief diplomat and
enforcer of visa policy. Shifting the latter function to Homeland Security
would enhance national security as well as the efficiency of immigration
law administration.

The
vast majority of individuals who enter the country every year are
non-immigrants. For 2004 the Department of Homeland Security estimated that
there were 179 million non-immigrant admissions—that is, entries by foreign
nationals authorized for temporary stays. Cite.

The vast majority of them —148 million—are Canadians and Mexicans who have
Border Crossing Cards that allow them to cross the border for short stays,
including daily commutes to work. Another 30.8 million are tourists,
businessmen, and students who enter on non-immigrant visas.

A State Department consular officer must ascertain whether
a non-immigrant visa applicant is from his stated country of origin and
determine the likelihood that the applicant will not overstay his visa. Cite.

In making this determination, the officer interviews the applicant while
also relying on his knowledge of the economic and social conditions in the
applicant’s country, the applicant’s supporting documents—and intuition.

The interviewing officer will issue the visa if he is
convinced that the applicant’s ties to his home country necessitate his return
(and if the applicant passes a computerized background check). Otherwise, the
officer will deny the visa.

Immigrant Visas

Consular officers are also responsible for interviewing
applicants for immigrant visas, which are the first step toward obtaining
permanent U.S. residency or a green card. As with non-immigrant visas,
the law provides for different types of immigrant visas, from family-based and
employment-based visas to so-called diversity visas issued by lottery to
citizens of many countries. Although Homeland Security prepares and approves
the initial paperwork in the United States, State Department
personnel interview applicants at the U.S. consulate in their country of origin.

For family-based visas, which constitute the majority of
immigrant visas, the verification process centers around the affidavit of
support: Visa applicants must be sponsored by one or more family members who
pledge to support the immigrant financially for an initial period. (The law
prohibits issuance of a visa to an alien likely to become a “public
charge.”) If the sponsor’s income falls
below established poverty guidelines, the visa application is supposed to be
rejected.

In practice, consular officers routinely ignore this
provision and issue visas to applicants whose sponsors are already living well
below the poverty line, before the added burden of newcomers. Cite.

This blind eye explains, in part, why immigrants are a large and growing
presence in the U.S. poverty population.

Visa Fraud

Document fraud is the most common violation in the
immigration process. Applicants throughout the world use fraudulent means to
obtain visas. Compared to the cost and danger involved in using the services of
a professional alien smuggler for an illegal border crossing, it is easier and
safer for an would be immigrant to pay a $45 visa interview fee and mislead a
consular officer who has received training in cultural sensitivity and
interview courtesy. Cite.

Non-immigrant visa fraud typically consists of fake
documents or information regarding prior visa applications or stated purpose of
visits to the United
States.

Illegal visa document mills are usually located close to
the American embassyand are well known to consular officers. Although visas
aren’t issued when false documents are detected, fraudulent applicants are
rarely reported to the local police. Cite.

These would be easy cases to prosecute, and the image of a bogus applicant
being detained or arrested could have a huge impact on others contemplating
this crime.

The System Doesn’t Work

In recent years 1.0 to 1.5 percent of foreign nationals who
entered on non-immigrant visas have overstayed. Cite. That implies 250,000 to 350,000 illegal
aliens each year—or as much as 45 percent of the annual increase—are
overstayers. All of these individuals successfully passed the State
Department’s screening process.

Given the institutional culture in which State Department
consular officers work, this is not surprising. Cite.
It is hard to imagine two more incompatible functions than diplomacy and
rigorous enforcement of U.S. immigration laws. Diplomacy requires tact, negotiation,
compromise, and conciliation. By contrast, law enforcement requires strict
adherence to the letter of the law and intolerance of criminal conduct. Cite.

For a consular officer, fighting visa fraud is an
inconvenient obstacle to the diplomatic mission. This may explain why 70
percent of non-immigrant visa applications reviewed at the Mexico City embassy
are approved—an absurdly high figure in light of the fact that half of illegals
in the United States are from Mexico.

It is impossible to focus on both priorities. The State
Department should be allowed to practice “diplomacy,” and its visa issuance
responsibilities should be transferred to Homeland Security.

Refugee Admissions Program

A refugee is a person who has crossed an international
border and is unwilling or unable to return home because of past persecution or
a well-founded fear of persecution due to his race, religion, nationality,
membership in a particular social group, or political opinion.

The Refugee Admissions Program (USRAP) is administered by
the State Department’s Bureau of Population, Refugees, and Migration (PRM). PRM
relies on multilateral organizations, non-governmental organizations (NGO)s, and
other government agencies to facilitate the resettlement of displaced people in
the United
States. Cite.

Many of the non-profit organizations funded by this program
were created by the refugees themselves—a potentially massive conflict of
interest.

The 2008 budget allocates $774 million for “Migration and
Refugee Assistance”—up from $750 million the prior year.

Since 1975 USRAP has resettled more than 2.6 million
refugees in the United
States.
Cite. Each year the President consults
with Congress to determine the number of refugees the United States will aim to resettle in the following year. This
consultation sets in motion a complex process that identifies, screens, and
prepares refugees for whom resettlement in the United States is deemed the best option.

Refugee arrivals declined sharply in the years immediately
following the attacks of September 11, 2001 (9/11). Since 2003 they have nearly doubled, although
still below pre-9/11 levels:

Less than 500 Iraqi refugees were admitted during the three
years 2003 to 2005. This trickle may
soon become a torrent: In May 2007 PRM announced “The U.S. Refugee Admissions
Program is currently expanding its capacity to consider Iraqi refugees for
resettlement in the United States.” Cite.

Iraqis must leave Iraq in order to apply for admission as a refugee. This is
consistent with the definition of “refugee” as someone who has crossed an
international border.

A May 2007 State Department statement urges Iraqi asylum seekers located
in third countries to “register with the nearest United Nations High
Commissioner for Refugees (UNHCR). Cite. UNHCR has the international mandate to
provide protection and assistance to refugees and can provide a protection
document and possibly other assistance if needed. For a small number of
extremely vulnerable individuals, this could include referral to the USRAP or
another country’s resettlement program. UNHCR will identify individuals for
resettlement referral based on an assessment of their vulnerability at the time
of registration.”

But the “small number” of refugees selected for
resettlement in the United States turns out not to be small at all: UNHCR has
made the commitment to the U.S. to refer 7,000 Iraqis in Jordan, Syria, Egypt,
Turkey, and Lebanon to the U.S. Refugee Admission Program for consideration for
resettlement by September2007. This is the number that is expected to be
received in the first tranche of referrals. However, the U.S. expects to receive additional referrals after the first
7,000 have been submitted, and 7,000 is not a limit on the number of Iraqis the
U.S. will consider for the USRAP. We are also exploring other
avenues of access to the USRAP in addition to UNHCR referrals. Cite.

Note that 7,000 is “not a limit” on the number of Iraqi
refugees to be admitted to the United States.

Refugees have already emerged as a large and growing fiscal
burden. They are immediately eligible for various government welfare programs,
and the evidence is clear that they stay on them. Moreover, they start
chain-migrating relatives under the “family reunification” provisions of
current law.

In absolute terms, the largest migration of refugees to
these shores occurred during the Cold War. Millions of displaced persons fled Eastern Europe
after the Soviet takeover. To embarrass the Soviet Union,
the United
States
passed the Displaced Person (DP)Act of 1948, enabling DPs to enter the United States as refugees. From 1945 to 1960 668,000 European refugees
came here. Cite.

After declining in the 1960s and 1970s, the European influx
resumed after 1980, spurred by the Soviet
Union’s collapse and war in the
Balkans.

A total of 1.5 million European refugees became permanent U.S. residents between 1945 and 2002. This represented 0.3
percent of the 1950 population of Europe.

But other regional conflicts
have triggered much larger refugee movements relative to population. Here, for
example, is the cumulative refugee total received by the United States as of
2002, expressed as a percent of the home country’s population at the
(approximate) year of the conflict:

- 9.9 percent of Cuba’s population since 1960

- 2.0 percent of Bosnia’s population since 1990

- 1.6 percent of Vietnam’s population since 1970

- 0.3 percent of Somalia’s population since 1990

The State Department’s efforts on behalf of
displaced Iraqis could presage a refugee influx of similar magnitude. Applying
these population shares to Iraq’s current 25 million population, we generate a plausible
range for the number and timing of Iraqi refugees settling in the United States:

- 75,000 Iraqi refugees by 2016 under the Somali refugee scenario

- 500,000 Iraqi refugees by 2016 under the Bosnian scenario

- 560,000 Iraqi refugees by 2036 under the Vietnam scenario

- 2.5 million Iraqi refugees by 2044 under the Cuban scenario

Fiscal Impact of Iraqi Refugees

The fiscal year (FY) 2008 budget contains $774 million for
“Migration and Refugee Assistance”—up from $750 million the prior year.

The lion’s share of the public costs associated with
refugees occurs at the state and local level, where refugees are eligible for a
wide array of social programs and benefits—including access to public
education.

In recent testimony before
the House Judiciary Committee, Robert Rector estimated the fiscal deficit of
households headed by immigrants who lack a high school diploma—a
reasonable proxy for refugees. Cite. Rector finds that the
average uneducated immigrant household:

- Receives$30,164 in government benefits

- Pays $10,573 in government taxes

- Generates a fiscal deficit of $19,588 ($30,164
less $10,573)

Under the “Cuban scenario,”
2.5 million Iraqi refugees could eventually settle in the U.S.

This translates to 625,000 Iraqi (4-person)
refugee households, implying that the fiscal deficit (benefits received less
taxes paid) for Iraqi refugees could equal $12.1 billion (625,000 × $19,588).
More than half of this deficit—$6.7 billion—occurs at the state and local government
level.

Bottom line: $12 billion a year, or about 0.1 percent of current
GDP, could eventually be transferred from native taxpayers to Iraqi refugees. ■

About the author

Edwin S. Rubenstein, president of ESR Research, economic consultants, has 25 years of experience as a business researcher, financial analyst, and economics journalist. Mr. Rubenstein joined the Hudson Institute, a public policy think tank headquartered in Indianapolis, as director of research in November 1997. While at Hudson he wrote proposals and conducted research on a wide array of topics, including workforce development, the impact of AIDS on South Africa's labor force, Boston's "Big Dig" the economic impact of transportation infrastructure, and the future of the private water industry in the United States.

As a journalist, Mr. Rubenstein was a contributing editor at
Forbes Magazine and economics editor at
National Review, where his "Right Data" column was featured for more than a decade. His televised appearances include Firing Line, Bill Moyers, McNeil-Lehrer, CNBC, and Debates-Debates. In
The Right Data (National Review Press, 1994), Rubenstein debunks many widely held beliefs surrounding the distribution of income, government spending, and the nature of economic growth.

Mr. Rubenstein is also an adjunct fellow at the Manhattan Institute where he is principal investigator in the institute's ongoing analysis of New York state's budget and tax structure. He also published a newsletter devoted to economic statistics and contributed regularly to
The City Journal, the Manhattan Institute